applying business model canvas in an internal …
TRANSCRIPT
Bachelor’s thesis International Business Degree programme Bachelor of Business Administration (BBA) 2014
Tom Sivén
APPLYING BUSINESS MODEL CANVAS IN AN INTERNAL PROJECT FUNDING CASE: IB-HUB
- Business Model Canvas applied with a project plan for improving internal Research, Development and Innovation project funding processes at Turku University of Applied Sciences.
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BACHELOR´S THESIS | ABSTRACT TURKU UNIVERSITY OF APPLIED SCIENCES International Business Degree programme Bachelor of Business Administration 2014 | 47 pages Matti Kuikka
Tom Sivén
APPLYING BUSINESS MODEL CANVAS IN AN INTERNAL PROJECT FUNDING CASE: IB-HUB
During the past few years, internal projects were launched at Turku University of Applied Sciences at a growing rate. One of these internal projects has been IB-HUB, which brought the idea of improving the internal Research, Development and Innovation project funding processes of Turku University of Applied Sciences. Idea was to apply the Business Model Canvas theory in the project planning.
Originally, the Business Model Canvas theory was developed to help companies to have an overview about their business model and ease the strategically thinking by seeing things connected rather than as separated blocks inside the company. Business Model Canvas brings the Value Proposition to the focus of observation and tides important aspects around it, bringing the business model to view in its' entity.
The research was taken into action by applying Business Model Canvas theory in the project planning to enhance and improve the quality of projects as well as to ease the work of Research, Development and Innovation steering group. By developing Business Model Canvas into a project tool, it can be added into the project planning stage and it can ease thinking process. This research aims to find out benefits and problems that may concern this new tool for project planning.
This research will also look at the NABC model as it is widely used in project planning as a supportive tool for more systematic approaches to the value proposition. There is comparison between the included theories in this research. As a result the research proves that Business Model Canvas is applicable to use in the internal project funding processes at Turku University of Applied Sciences.
KEYWORDS:
Business Model Canvas, internal funding processes, project planning, organizational behavior, financing processes, Innovation, research and development, Business ICT and life sciences, the NABC model.
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OPINNÄYTETYÖ (AMK) | TIIVISTELMÄ TURUN AMMATTIKORKEAKOULU Kansainvälisen Liiketalouden koulutusohjelma Tradenomi Marraskuu 2014 | 47 sivua Matti Kuikka
Tom Sivén
BUSINESS MODEL CANVASIN SOVELTAMISTA SISÄISEN PROJEKTIRAHOITUKSEN TAPAUKSEEN: IB-HUB, TURUN AMMATTIKORKEAKOULUSSA
Sisäisten projektien määrä on kasvanut kiihtyvällä vauhdilla viime vuosien aikana Turun Ammattikorkeakoulussa. Idea sisäisen rahoituksen prosessin kehittämiselle Tutkimus, Kehitys ja Innovaatio projektien kautta lähti liikkeelle yhdestä Turun Ammattikorkeakoulun sisäisestä projektista: IB-HUB. Idean lähtökohtana on Business Model Canvas teorian soveltaminen projektien suunnitellussa.
Alun perin Business Model Canvas teoria kehitettiin auttamaan yrityksiä näkemään liiketoimintamallinsa kokonaisuutena helpottamaan taktista ajattelua. Näkemällä asiat yhdessä eikä erillisinä osina liiketoimintaa, Business Model Canvas yhdistää fokuksen ja sitoo muut tärkeät näkökohdat sen ympärille. Tämä tuo liiketoimintamallin esille kokonaisuudessaan selvällä tavalla.
Tutkimus toteutettiin soveltamalla Business Model Canvas teoriaa projektien suunnittelussa. Teoria auttaa parantamaan projektien laatua ja helpottamaan tutkimus-, kehitys- ja innovaatio ohjausryhmän työtä. Business Model Canvas voidaan ottaa projektisuunnittelussa käyttöön kehittämään ja helpottamaan projektisuunnittelun prosessia. Tämän tutkimustyön tavoite on löytää hyödyt sekä mahdolliset ongelmat, jotka liittyvät tämän uuden työkalun käyttöön projektisuunnitellussa ja sisäisen projektirahoituksen prosesseissa.
Tämä tutkimus käy myös läpi NABC mallin. Kyseinen malli on hyvin laajalti käytetty tukevana työkaluna arvolupausten löytämiselle. NABC malli hyödyntää systemaattista lähestymistapaa projektisuunnittelussa. Lisäksi tutkimus sisältää näiden kahden mainitun teorian vertailua. Tutkimuksessa käy ilmi, että Business Model Canvas on hyödyllinen sisäisten projektien rahoitushaku prosessin kannalta Turun Ammattikorkeakoululla.
ASIASANAT:
projektisuunnittelu, sisäinen rahoitushaku prosessi, rahoitustoiminta, Liiketalous ICT ja Bioalat, Business Model Canvas, Tutkimus, Kehitys ja Innovaatio, organisaatiotoiminta, NABC malli
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CONTENT
LIST OF ABBREVIATIONS 6
1 INTRODUCTION 7
1.1 BACKGROUND FOR THE RESEARCH 7
1.2 RESEARCH QUESTIONS: 8
1.3 RESEARCH GOALS: 8
1.4 RESEARCH CHAPTERS AND THE CONTENT 8
2 DEFINING THE BUSINESS MODEL CANVAS THEORY 9
2.1 VALUE PROPOSITION. 10
2.2 CUSTOMER SEGMENTS 11
2.3 CUSTOMER RELATIONSHIPS 12
2.4 CHANNELS 13
2.5 KEY PARTNERS 14
2.6 KEY ACTIVITIES 15
2.7 KEY RESOURCES 16
2.8 COST STRUCTURE 17
2.9 REVENUE STREAM 18
3 THE NABC MODEL 19
4 RESEARCH, DEVELOPMENT AND INNOVATION 20
4.1 RESEARCH, DEVELOPMENT AND INNOVATION DEPARTMENT 20
4.2 RESEARCH, DEVELOPMENT AND INNOVATION ROLES 21
4.3 RESEARCH, DEVELOPMENT AND INNOVATION STATISTICS 2013 22
4.4 EXAMPLE RESEARCH, DEVELOPMENT AND INNOVATION PROJECTS 23
4.5 PROJECT JOURNEY THROUGH BIL FACULTY IN TURKU UNIVERSITY OF APPLIED
SCIENCES 24
5 RESEARCH METHODOLOGY 26
5.1 QUALITATIVE RESEARCH 26
5.2 DOCUMENTATION OF THE INTERVIEW 29
6 THE INTERNAL FUNDING CASE: IB-HUB 31
6.1 INTRODUCTION OF IB-HUB 31
6.2 IB-HUB CASE TESTED ON BUSINESS MODEL CANVAS 32
6.3 BUSINESS MODEL CANVAS OF IB-HUB 33
7 INTERVIEW SUMMARY 34
7.1 INTRODUCTION OF THE INTERVIEWEES 34
7.2 PROJECT FUNDING IN TURKU UNIVERSITY OF APPLIED SCIENCES 35
8 CONCLUSION OF THE FINDINGS 39
8.1 DISCUSSION OF THE FINDINGS 39
8.2 SUGGESTION/S BASED ON THE FINDINGS 40
REFERENCES 42
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APPENDICES
Appendix 1. TKI-Haastattelu Kysymykset / Research, Development and Innovation-Interview questions
Appendix 2. The crew of Turku University of Applied Sciences
FIGURES
Figure 1: The figure represents the table of content for this research 8
Figure 2: Research, Development and Innovation Budget for 2013 split (Turku University of Applied Sciences, 2014). 22 Figure 3: Research, Development and Innovation Projects 2003-2013 (Turku University of Applied Sciences, 2014). 23
Figure 4: A new journey for the new idea through BIL faculty in Turku University of Applied Sciences (Interviews, 2014). 25 Figure 5: Thesis creation process. 26
Figure 6: IB-HUB applied with Business model Canvas (IB-HUB Project Plan v05, 2013). 33
PICTURES
Picture 1: Business Model Canvas (Foundry, 2014). 9 Picture 2: Key Resources Building Block (Arrowhead, 2014). 16
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LIST OF ABBREVIATIONS
NABC Need, Approach, Benefits and Competition. The NABC model can be used anywhere from basic research to commercialization projects, as well as for new business planning. The model has been developed in Stanford Research Institute ‘SRI’.
JAMK Jyväskylän Ammattikorkeakoulu, Jyväskylä University of Applied Sciences
BIL (Liiketalous, ICT ja Bioalat) Business, ICT and Life Sciences at Turku University of Applied Sciences
DMU Decision Making Unit, a group of individuals who make up the team for decision making (Friesner, 2014).
SME Small and Medium sized Enterprises. (European Comission, 2005).
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1 INTRODUCTION
1.1 BACKGROUND FOR THE RESEARCH
This research has been conducted on the growing number of internal project
funding applications in Turku University of Applied Sciences. The main goal for
the research is to find out the possible synergy that could boost the internal
project funding processes with the Business Model Canvas theory. This research
is limited to Business, ICT and Life Sciences (BIL) faculty of Turku University of
Applied Sciences due to the limited amount of interviews done for the research
and the subjective observation.
“The real problem may not be the one that looks like one at first sight” (Kananen,
2011, p. 33). Therefore in the research the weight is set on trying to see the
projects overview easily and effectively by using the adapted tool in the original
project plan. Business Model Canvas is a tool well used for finding the core idea
of the business plan. This research will try to apply Business Model Canvas with
the premade project plan of Turku University of Applied Sciences in case of the
IB-HUB.
The method for researching the possible synergy is through a case of the internal
project funding. The case project ‘IB-HUB’ is currently active and therefore the
research may benefit the project by useful information regarding the internal
funding process of Turku University of Applied Sciences. This research has been
agreed with Innovative Business and Entrepreneurship research group from the
BIL faculty. The goal is to test-drive Business Model Canvas with the project
planning phase in the near future.
Business Model Canvas is planned to be a supportive tool in internal project
funding processes among the already existing theoretical tools such as the NABC
model. This research will additionally compare Business Model Canvas with the
current supportive tool NABC model. The purpose for comparison is to find out
the differences and benefits from both supportive theories.
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1.2 RESEARCH QUESTIONS:
- What is the Business Model Canvas theory?
- Comparison between the NABC model and the Business Model Canvas
theory. How are they different?
- How are the Research, Development and Innovation activities organized
in Turku University of Applied Sciences?
- Case: How is IB-HUB project plan applied with Business Model Canvas
and does the IB-HUB project plan fit with Business Model Canvas?
- Should Turku University of Applied Sciences take Business Model Canvas
as a supportive tool for project planning processes?
1.3 RESEARCH GOALS:
- To introduce the Business Model Canvas theory for the reader
- To introduce the NABC model for the reader
- To find synergies between the Business Model Canvas theory and internal
project funding of Turku University of Applied Sciences, with the case of
IB-HUB.
1.4 RESEARCH CHAPTERS AND THE CONTENT
Introduction
Chapter 1
Research background
Objectives of the
research
Literature review
Chapter 2-4
Business Model
Canavas
The NABC model
Turku University of Applied Sciences
Methodology
Chapter 5Qualitative
Analysis
Chapter 6-7
Interview summary
IB-Hub
Conclusions
Chapter 8Discussion Suggestions
Figure 1: The figure represents the table of content for this research
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2 DEFINING THE BUSINESS MODEL CANVAS THEORY
Business Model Canvas consists of 9 different parts, which are all related to each
other at many separated levels. It could be considered as some sort of summary
of the activities that a company or an organization has to perform in order to
provide their value offering (products, services or other value offering) to their
customers, partners and stakeholders. Business Model Canvas eases the
observation of the business model case and its’ activities. The canvas has been
implemented in many ways to suit and serve the possible variety of different
canvas users.
Observing the Business Model Canvas theory, should begin with going through
all of the different building blocks of the canvas. There are in total nine blocks,
which are: Key Partners, Key Activities, Key Resources, Value Proposition,
Customer Relationships, Customer Segments, Channels, Cost Structure and
Revenue Streams.
Picture 1: Business Model Canvas. (Osterwalder, et al., 2010) Picture 1: Business Model Canvas (Foundry, 2014).
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2.1 VALUE PROPOSITION.
“The Value Propositions Building Block describes the bundle of products and services that create value for a specific Customer Segment” (Osterwalder et al., 2010, p. 22).
Value Proposition is located in the centre of Business Model Canvas for providing
the optimal place for the value offering, which the user of Business Model Canvas
desires to bring upfront for others to see and recognize. Focusing so strongly on
the Value Proposition Building Block is usually taken as ‘Offer Driven’ method.
Offer Driven means simply that the main weight of the business plan and ideology
is based on the value proposition in more unique way than what the competitors
are capable of.
Value Proposition is the element, which is considered as the most important for
the business to success. Every organization, startup, project and other similar
users that are using Business Model Canvas have their own value proposition for
the key relationships. Through the value offering they are able to differentiate
their businesses and offering from others and create stable business.” A startup
also has figure out how it’s different or unique, and how it can convince users it’s
the best choice” (Evans, 2013).
Therefore it is important to be able to recognize the value proposition which is
offered to the customers. For this recognition phase there are several ways to
ease the work and finding the right value proposition for the business. Presenting
questions when creating a value proposal is very efficient way to find the right
propositions that can be offered. Observing the problem that the value proposition
is trying to solve out for the customer is important. Value Proposition Building
Block can be different for each Customer Segment named in Business Model
Canvas. Some Customer Segments are offered different benefits and values than
others, based on the 20-80-30 rule from business to business marketing. Shortly
presented: “20:80:30. This rule states that 80% of profit is generated by 20% of
customers. While the 30% of customers that are not very profitable generate
costs equal to half of the revenue generated by the most profitable customers.”
(Comarch, 2010.)
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2.2 CUSTOMER SEGMENTS
“The Customer Segments Building Block defines the different groups of people or organizations an enterprise aims to reach and serve” (Osterwalder et al., 2010, p. 20).
Customer Segment is located in the right corner of Business Model Canvas. The
importance of this part is considerably high as targeting the right customers is
very important in business to business just like in business to consumer markets.
Sometimes the focus is mainly on customers and their needs from basic to
exclusive requirements. This means that it is customer driven business model, as
the focus of Business Model Canvas has been placed on the Customer Segment.
When planning and forging the business according to different customer groups,
there are some questions that need to be answered.
“For whom are we creating value? Who are our most important customers?” (Osterwalder et al., 2010, p. 21).
Choosing the most important customers or the customer segment may not be the
easiest choice of the decision makers. The way customers are segmented may
vary depending on the relationship they are able to create and contain with the
company, their willingness to pay for additional services and extra value and their
unique communication towards the value offered whether it is visiting the store,
calling with a phone or booking online.
“Customer groups represent separate segments if:
Their needs require and justify a distinct offer
They are reached through different distribution channels
They require different types of relationships
They have substantially different profitability
They are willing to pay for different aspects of the offer” (Osterwalder et al., 2010, p. 20).
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2.3 CUSTOMER RELATIONSHIPS
Customer Relationships are formed between the organization and the customer.
Some examples could be face to face communication, co-creation of content,
professional transactional relationship, the relationship based exchange of
information, self-service, automated services, personal assistance and so forth.
(Osterwalder et al., 2010, p. 28.)
Customer relationships are driven by motivational factors such as: new customer
acquisition, customer retention and boosting up the sales (Osterwalder et al.,
2010, pp. 28-29).
There are other motivations, such as in business to business sales the
relationship building can open up new deals between the partners. Even co-
operations and ultimately acquisition of the partner company may be the
motivations. This could be imagined in the case of Microsoft and Nokia. They had
very good business to business relationship and they ended up merging mobile
phone businesses together after co-operating in the mobile phone markets.
“Many alliances fail… many also end up in a takeover” (Deresky, 2014, p. 239).
In business to consumer sector the additional motivations are more likely for long
term customer relationship and empowering the brand’s quality and services to
the customers. This may be considered as the boosting up sales, or in other
words up-selling.
In both business to business and business to the consumer fields it is advisable
to open up the Customer Relationships Building Block, those which already exist
and those which should exist. It is a remarkable cost sometimes to maintain a
good customer relationship with a business partner or with a specific customer
segment. If they are not observed, they may at one point create problematic
situations for the business itself.
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2.4 CHANNELS
“The methods by which the organization’s services will be delivered and the
audiences reached.” (Chaffey, 2013).
Channels are the ways and methods for the organization to reach their audience
and customers for the value proposition delivery. Depending on these channels
and how they function, the customers will be either pleased for the service
provided or disappointed with the system. This is why channels play such an
important role in Business Model Canvas and in the strategical business
planning. Some of the main functions of the Channels Building Block are to
maintain and increase the customer awareness about the products and services
provided by the company, assisting the customer to consider the value
proposition given by the company and to deliver both the purchased product as
well as the post-purchase customer support in case if the value proposition failed
the customer.
Channels include five phases that are unique to each other as Osterwalder et al.,
(2010), state. The phases are as following:
1. Awareness
Increasing the information about the products and services available
for the customers
2. Evaluation
Helping the customer to understand the value proposition and the
benefits that are being offered.
3. Purchase
The method by which customer obtains and delivers the payment for
the goods selected by customer itself.
4. Delivery
The actual transfer of the service or product to the customer.
5. After Sales
Service after the purchase has been completed. Such as, feedback
inquiries, repair services and similar additional value packages.
(Osterwalder, et al., 2010, pp. 26-27.)
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2.5 KEY PARTNERS
“The Key Partnership Building Block describes the network of suppliers and
partners that make the business model work” (Osterwalder et al., 2010, p. 38).
While another description about partner relationship is more open minded and
generalized as a whole partnership idea.
“An individual or a company who has some degree of involvement with another
entity's business dealings. The term ‘business partner' can have a wide range of
meanings, with one of the most frequent being a person who, along with another
person, plays a significant role in owning, managing, or creating a company (two
best friends who start a business together would consider themselves business
partners). The term is frequently used for two businesses that cooperate, to any
degree, such as a computer manufacturer who works exclusively with another
company who supplies them with parts.” (Dictionary, 2014.)
Partnership with other company or individual can often become the block that
supports all the actions inside the partnership companies. There are various
reasons for forging a partnership with external parties. Some of these reasons
are to economically benefit both parties, to develop new businesses, to assure
reliable supplies for the customers or simply to create a more powerful branding
image for the end customers and being able to offer high quality services
alongside with the main value offering. One great example of such partnership
would be “Walmart and FedEx” (Lambert, 2014).
For the motivational part of forming the partnerships it may be beneficial to extract
three different aspects why a company usually forms a partnership with another
company as Osterwalder et al., (2010) state:”
1. Optimization and economy of scale
2. Reduction of risk and uncertainty
3. Acquisition of particular resources and activities”
(Osterwalder et al., 2010, p. 39.)
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2.6 KEY ACTIVITIES
Key Activities are the processes inside the organization, which produce the
additional value to the services. These processes increase the total offering and
value of it, therefore increasing the possibilities of improved revenue. Key
Activities Building Block describes the internal processes of the organization,
while they can include some of the external activities in addition. Key Activities
are related strongly with the Key Resources and the Value Proposition as it is the
tool which brings the value offering and makes it possible to offer.
Key Activities can be categorized into areas of activities. For an example
Production, Problem Solving and Platform/Network as described by
Osterwalder et al., (2010, pp. 36-37):
Production activities are compared with designing, making and delivering
products or services in substantial quantities and/or of premium quality.
Production activities are usually the dominating activities in manufacturing firms,
less dominating in the service segment businesses.
Problem solving then again includes activities that focus on finding solutions to
individual customer problems. These activities require a high amount of
knowledge management, active learning and organized background operations
of the firm. The typical examples of problem solving activities focused could be
hospitals and consultancy companies.
Platform/Network based businesses are relied to their key resources (platforms
and networks). Key activities in this category mainly relate with the promotion of
the business platform, management of the platform and service provisioning.
Some examples of this type of businesses are: Alibaba, Online poker websites,
and Blizzard Entertainment.
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2.7 KEY RESOURCES
Key Resources are there to support and make the Key Activities possible. Human
resources, financial situation, available equipment, and many other physical as
well as tangible resource can be part of the organizations Key Resources. Of
course as the name points out, this part is only to list the Key Resources of the
organization, leaving out the resources which are not crucial for the activities to
take place.
All similar businesses do not always require the same resources in order to have
their business model work. Some companies are relying more on the intellectual
resources (books, brands, patents, copyrights and so forth) rather than the
physical resources (warehousing, logistical infrastructure, tools for heavy lifting
and so forth). Even though some resources vary from company to another, it is
guaranteed that there will always be human and financial resources required. Key
Resources are the “most important assets required to make a business model
work”. (Osterwalder et al., 2010, pp. 34-35.)
Key Resources are connected with the Key Activities and Key Partners. Key
Partners might provide some of the Key Resources, which are then afterwards
needed for performing the Key Activities. This way Business Model Canvas is
able to connect your mindset into a systematical overview about the business
model.
Picture 2: Key Resources Building Block (Arrowhead, 2014).
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2.8 COST STRUCTURE
“Different cost-elements, these should be checked against activities and
resources. Costs are classically broken down into Fixed and Variable costs and
economies of scale.” (Chaffey, 2013).
Cost structures are important for the general picture of the business model, they
define the profitability of the organization along with the revenue stream part. The
Cost Structure can show the organization where they could possibly reduce their
costs and by doing so improve their profitability.
If the Cost Structure is torn apart into segments, we can find multiple categories
for the costs from creating and delivering the value, Customer Relationships, Key
Activities, obtaining Key Resources and other similar costs. Some of these
categories are: Cost-driven and Value-driven. The cost structures have some
of the following characteristics: Fixed costs, Variable costs, Economies of scale,
Economies of scope and so forth. (Osterwalder et al., 2010, pp. 40-41.)
Cost-driven business models target their activities to reduce all costs whenever
it can possibly be done. These models tend to have high automation, outsourcing
and low price value proposition. Examples of these cost-driven businesses could
be toothpaste producers, massive restaurants for hospitals and the public sectors
trying to minimize their costs for general management.
Value-driven businesses are targeting their activities towards their value
proposition, ignoring some of the cost implications. These types of businesses
focus on offering luxurious value proposal to their customers and by doing so
their value offerings are often tailored to the customer’s needs. Examples could
be luxury restaurants, private hospitals and exclusive tourism companies.
Additionally, costs can be seen from the production point of view: where you
separate the Indirect and Direct costs of manufacturing and add the sales and
general administration costs. On top of that you add profit to receive the sales
price for the final product. (Hiroyuki, 2014.)
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2.9 REVENUE STREAM
“This is the method by which a business derives income. Common online options
are: advertisement revenue, subscription fees, and sales of physical or virtual
goods or affiliate based commission arrangements. Licensing and leasing are
other alternatives” (Chaffey, 2013.)
Revenue Streams can be supporting partnerships or governmental financial
support to the business. However, as in the definition of Revenue Stream we can
observe that “The Revenue Stream Building Block represents the cast a company
generates from each Customer Segment (cost must be subtracted from revenues
to create earnings)” (Osterwalder et al., 2010, pp. 30-33).
Looking at the definition from Chaffey (2013) and comparing with Osterwalder,
Pigneur, & Smith (2010) we can clearly see that the definitions are coming from
two point of views: one more focused towards online Revenue Streams and the
other more generalized to any business model. Revenue Stream connects with
the Customer Segments Building Block, as it tries to find the answers to how
much customers are willing to pay for their value offering. This leads the
businesses to have multiple ways for generating Revenue Streams from the quite
various and unique Customer Segments that they might have. Some of these
ways to generate Revenue Streams could be:
Assets sale, Usage fee, Subscription fees, Lending/Renting/Leasing, Licensing,
Brokerage fees and Advertising (Osterwalder et al., 2010, p 31).
All of the mentioned ways to receive revenue may have different pricing
mechanisms. The pricing method may affect the revenue level dramatically.
There are nearly as many pricing types as there are Revenue Streams, and they
are unnecessary to be categorized for the purposes of this research.
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3 THE NABC MODEL
The NABC model is a supportive tool for development, presentation and project
management. It was created in the United States of America by the Stanford
Research Institute, ‘SRI’. The model has been adopted since the beginning with
several other subjects, and been used to support the reasoning behind ideas.
The NABC term is formed by four words, which all had their first letter taken into
the term. For understanding the NABC model, it is important to understand the
words that form the term itself.
“N for Need. N is the most important factor in the method. An idea without a
practical need for it remains just what it is: a good idea and nothing more”
(Christian, 2012). Need is the core purpose of the project to be funded, and is
used in Turku University of Applied Sciences to describe the value proposition of
the idea. This basically is equal to, Value Proposition in Business Model Canvas.
“A for Approach. A is usually a point of departure for most activities, but with the
NABC method, A always comes after N” (Christian, 2012). Approach is the way
the projects are going to perform and act. Basically this Approach is almost equal
to the Key Partners, Key Activities, and Key Resources Building Blocks in
Business Model Canvas.
“B for Benefit. B stands for the innovative elements of an idea, in other words
that which constitutes its uniqueness” (Christian, 2012). Benefits are defined in
project funding by the value that is generated both for the organization and the
customers. This could include both Value Proposition and the Channels used to
reach the Customer Segment in Business Model Canvas.
“C for Competition. C stands for a study of the competition existing in the area
concerned. C is often mistaken for N. C, however, focuses on the reality within
which a concept has to function” (Christian, 2012). Competition is something
unique in the NABC model, which Business Model Canvas lack. Competition in
the project funding is important although sometimes difficult to measure.
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4 RESEARCH, DEVELOPMENT AND INNOVATION
“Research, Development and Innovation Services at Turku University of Applied
Sciences are functioning in a key position within the innovation system of
Southwestern Finland, Turku University of Applied Sciences represents the top
tier of multidisciplinary applied research and development in the country. Our
active co-operation with working life and other higher education institutions
ensures two-way exchanges of the most up-to-date knowledge and practical
applications, all of which can be directly integrated into our study programmes
and correspondingly employed in the business world.” (Turku University of
Applied Sciences, 2014.)
4.1 RESEARCH, DEVELOPMENT AND INNOVATION DEPARTMENT
Research, Development and Innovation in Turku University of Applied Sciences
has been split into different areas, according to the major educational subjects
that are being offered as degree programmes, located inside the different
Faculties. Under these research divisions, there are at least 28 different research
groups. These research groups are the key element for the Research,
Development and Innovation activities taken place in Turku University of Applied
Sciences. The research groups are using innovation pedagogy as their way of
working, meaning that they are combining students and lecturers and experts into
this pool of research resources and through the diverse range of perspectives the
participants can learn from one another.
Turku University of Applied Sciences engages in diverse and extensive research,
development and innovation activities. They participate in short development
projects as well as major projects spanning several years, both nationally and
internationally. In practice, these projects serve to develop products, services and
processes – and innovations. (Turku University of Applied Sciences, 2014.)
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4.2 RESEARCH, DEVELOPMENT AND INNOVATION ROLES
As previously mentioned, the Research, Development and Innovation activities
are divided between teaching faculties. Each faculty has its own Research,
Development and Innovation Manager, who is controlling the research groups
inside that faculty. In addition there is a Director of Research and Development.
These roles may have changed during the currently ongoing organizational
changes of Turku University of Applied Sciences.
The Director of Research and Development is controlling the overall activities of
the research groups. On top of that there is a Research, Development and
Innovation steering group, which includes also the Vice Rector. All the faculty
specific Research, Development and Innovation managers, Director of Research
and Development and Vice Rector are the “Decision Making Unit” (Friesner,2014)
of the Research, Development and Innovation activities.
The Decision Making Unit of Research, Development and Innovation is
controlling the following activities according to Turku University of Applied
Sciences:
the supervision of Research, Development And Innovation activities
networking
forecasting and planning
monitoring and developmental evaluation
reporting to the Executive Board
(Turku University of Applied Sciences, 2014)
Above these roles there are still multiple roles, which do not directly take part in
the activities however are part of many research groups and they take part in the
steering group meetings. Attached to the appendix, we have the entire crew of
Turku University of Applied Sciences from 2014 onwards as newly appointed.
These massive crew changes are part of the re-design of Turku University of
Applied Sciences as an organization due to the Polytechnic reform 2011-2014
(Ministery of Education and Culture, 2014).
22
4.3 RESEARCH, DEVELOPMENT AND INNOVATION STATISTICS 2013
The budget statistic shows the split between internal and external funding for the
Research, Development and Innovation projects in Turku University of Applied
Sciences for the year 2013. It is statistically good that the external funding is
larger than the internal funding amount. This means that the projects are more
funded externally by other organizations and partners than internally. Previously
in 2012 this statistic was 50% for both internal and external funding. (Turku
University of Applied Sciences, 2012.)
Looking at the Research, Development and Innovation Projects in Turku
University of Applied Sciences during 2003-2013 Figure 3, we can easily observe
that the number of newly found projects is increasing during the year 2013. These
statistics are not yet available for 2014. However there is ‘definitely increase in
the project amounts’ (Interviews, 2014).
In 2012, there were 240 ongoing projects and 100 newly founded projects. This
shows clear growth in the past two years for Research, Development and
Innovation project activities. (Turku University of Applied Sciences, 2012.)
External funding54 %
Internal funding46 %
Research, Development and Innovation Budget 2013
External funding
Internal funding
Figure 2: Research, Development and Innovation Budget for 2013 split (Turku University of Applied Sciences, 2014).
23
4.4 EXAMPLE RESEARCH, DEVELOPMENT AND INNOVATION PROJECTS
For a better view over Turku University of Applied Sciences Research,
Development and Innovation projects it is helpful to have a couple of examples.
These examples have been bigger co-operational projects with diverse groups of
partners and customers.
“IB-HUB” project is meant to offer internationalization services for small and
medium sized companies in South-West Finland. The project has been
running since 2013 and it involves students, lecturers and experts in its
activities. The goal is to create a great “project factory” to which any local
company can come and approach the IB-HUB staff and get some help to their
internationalization problems. IB-HUB is offering normal project based
solutions for also other than internationalization issues and organizing
seminars such as Internationalization Seminar and Open Innovation Seminar
annually. The project has so far obtained great interest in public organizations
and companies by acquiring partners and customers in the local area.
Figure 3: Research, Development and Innovation Projects 2003-2013 (Turku University of Applied Sciences, 2014).
24
“WISE (White Space Test Environment for Broadcast Frequencies) project
develops methods for the efficient use of frequencies. In addition to a test
environment, the project has developed software tools for the testing and
development of future wireless technologies by carrying out RF
measurements to identify potential disturbances, for example. The test
environment consists of the Turku digital television test network, the radio
laboratory at Turku University of Applied Sciences and a geolocation
database. The project has an extensive cooperation network of 15 companies
and organizations, including universities and the Finnish Communications
Regulatory Authority”. (Turku University of Applied Sciences, 2014.)
4.5 PROJECT JOURNEY THROUGH BIL FACULTY IN TURKU UNIVERSITY
OF APPLIED SCIENCES
For a new project to begin the journey towards Turku University of Applied
Sciences Research, Development and Innovation internal funding processes, it
has to go through the Figure 4. The idea comes up on a student or a staff member
and then it needs to be sketched (1, Figure 4). (Interviews, 2014.)
Based on the observations, there is already an existing sketch paper for new
ideas to guide the new project. This sketch paper currently includes the NABC
model to support the thinking process. However, there are some projects that
have difficult times to fill up the NABC model, and it does not bring the best part
into the view from the project.
After the project planning phase is over, the idea is presented in the research
group (2). After presentation it might be improved inside the research group,
sparring group or with the Project Coordinator. The project might bounce back
and forth these parties while being shaped into a good form (3, 4). (Interviews,
2014.)
Once the project plan is finalized and it is ready for the internal funding, then it
will be sent onward to the Research, Development and Innovation steering group.
25
Sending the project proposal to the Research, Development and Innovation
steering group works through “Projektori” the internal project database of Turku
University of Applied Sciences (5). (Interviews, 2014.)
During a steering group session the project will be introduced to the group and
then decided whether it shall pass to the Principle or not. If the steering group
approves it, then it will be sent to the Principle who will sign the project internal
fund request (6). After the funds have been permitted, the news will be spread
among all the parties involved with the project since it had been planned (7). Now
the project may begin to use the resources given. (Interviews, 2014.)
1
2 4
5
6
3
New Idea
Project planning
Research, Development
and Innovation steering
group
Research group
Sparring group
Project
Coordinator
Rector and President of
Turku University of
Applied Sciences
Figure 4: A new journey for the new idea through BIL faculty in Turku University of Applied Sciences (Interviews, 2014).
7
26
5 RESEARCH METHODOLOGY
This research has greatly been following the guidelines of “Rafting through the
thesis process” (Kananen, 2011, pp. 36-69) a step by step guide from JAMK.
Plan for the data collection is mainly
qualitative. There are different types of
materials that this research will obtain,
observational materials from one
Research, Development and Innovation
group during 2014 and specified
documents about different projects from
BIL faculty in Turku University of
Applied Sciences. After the basic
gathering has been completed the
focused interview part will begin. The
face to face focused interviews are
done in order to collect the ‘tacit’
knowledge about the research subject
and to make it more ‘explicit’ through the documentation of the interviews
(K.G.Saur & Hobohm, 2004, p. 41).
5.1 QUALITATIVE RESEARCH
This research is a qualitative research, therefore flexible and without a clear
process of measuring the theory with the case. For this reason, the research
process is a loop of gathering, qualitative research, investigation and producing.
These phases repeat each other for as long as the research is in lack of
information, answers and has not reached the research goal entirely. As a
qualitative research, the way the research is presented will be first going through
the theory, after which the empirical section is brought up to the observation of
the reader. This way the theory being applied is clear and easy to connect with
the case situation of this research.
Gathering(Academic information)
Qualitative research
(Focused interviews, observation and
documents related to the phenomena)
Investigation(Analysis of research
material)
Producing(writing thesis)
Figure 5: Thesis creation process.
27
5.1.1 PRACTICAL TEST: CASE IB-HUB
In this research, we go through Business Model Canvas with one case project.
This case project has been chosen as the example due to the existing and
available information of the project. The purpose of using the example of IB-HUB
is to help promote the project as one of the internal Research, Development and
Innovation projects of Turku University of Applied Sciences. As the IB-HUB
project is still active, it is important to look at Business Model Canvas for IB-HUB
to help the project with future internal funding applications and to have a general
understanding of what IB-HUB is all about. IB-HUB was chosen to be part of the
research as the researcher had been observing the proceeding of the project
since the beginning of it. This made it easier to build a bridge between theory and
practice, and apply Business Model Canvas on IB-HUB.
5.1.2 SELECTION OF INTERVIEWEES
For this thesis research there were approximately a handful of possible
interviewees. The method for choosing the interviewees was simple. The
interviewees were chosen from the Research, Development and Innovation
group in which this thesis research has been supported. The group supported the
research by allowing observation of the group meetings. From this Research,
Development and Innovation group, it was most useful to choose the Manager
and Project Coordinator for the interviews.
The selection of interviewees was based on the observation of the Innovative
business and entrepreneurship Research, Development and Innovation group’s
activities during 2014. This observation was very beneficial for the selection
process as it had given information about possible interviewees and clarified their
status in Turku University of Applied Sciences organization to the interviewer. In
addition it would had been probably good to interview a project member from the
IB-HUB case, nevertheless it was decided to be left out of this research as the
researcher has been closely working with the IB-HUB project in the past and has
a good amount of knowledge and information about IB-HUB.
28
5.1.3 FOCUSED INTERVIEW
“In a focused interview, the aim is to approach the phenomena from different
angles in order to understand it thoroughly” (Kananen, 2011, p. 54).The answer
that focused interview is proclaiming to reveal is like the core of an onion. It slowly
peels off one layer until it reaches the core answer to the research problem. This
is why the focused interview questions tend to have a follow-up question, as the
answer to the previous question might have revealed a new layer of the onion.
This way the follow up question will dig deeper and create a sequel of answers
towards the core answer. This is the process of switching from general answers
about the phenomena into more specific and detailed ones. This interview theory
was used during the interviews for this research.
Next it will be good to go through some of the ‘open-ended’ and ‘close-ended’
question types that are commonly used in the focused interviews and presented
by Kananen (2011, pp. 54-56).
Dichotomous questions are very general and usually the answer is short. The
questions can be the starting questions for a much larger set of questions
following after a simple answer. In this research, the dichotomous questions were
used to screen the answer and to allow the interviewer to follow up the
dichotomous question with a non-dichotomous question to get more depth to the
answer. As an example question for this research: “Are you familiar with the
Business Model Canvas theory?”
Non-dichotomous questions are the opposite of dichotomous questions, which
try to specify the phenomenon and find the core answer. These are commonly
used during the interview after the dichotomous questions to bring up the topic
again from another angle and to get a better idea about the phenomenon. As an
example question for this research: “Have you ever used Business Model Canvas
in projects?” (To be asked after the Dichotomous question example).
29
Leading questions are usually used in order to lead the topic of the interview
into the next theme of the whole phenomenon. They are typically quite
manipulative, giving an influence to the interviewee and guiding the answer in
one direction.
This is very favorable method in interviews if the interviewer already has an idea
of the phenomenon and wants to dig deeper into the core problem and fast. They
can nonetheless jeopardize the reliability of the interview work if used too much
and in wrong way (Kananen, 2011, p. 56).
As an example of leading questions in this research we can use a question from
the last thematic part about Business Model Canvas: “Should Business Model
Canvas be a part of the executive summary or just as an appendix file?” In this
example question the thinking is directed towards the project plan description file,
leaving out other possibilities from the thinking process.
5.2 DOCUMENTATION OF THE INTERVIEW
Documentation of the interviewees were done by recording the interviews with
Apple’s iPhone 5s device. The recordings were then later on saved on computer
device for transcription phase.
Recording allowed the interviewer in this research to focus on the interviewee
more specifically and bring out their ideas on a paper separately from the
recording. Recording is a good method for documenting the interviews, as it
allows the researcher to go back to the authentic situation and repeat it as many
times as necessary (Kananen, 2011, p. 56).
The risk of recording the interview always exists, if the recording system meets a
failure or for some reason does not clearly record the interview. This risk opposed
a very great threat to the research as the interviews were done in an open
environment with random people around instead of a closed area with only the
interviewer and interviewee. For avoiding this risk, the interviewer made notes
during the interview on the question papers in this research.
30
5.2.1 LEVELS OF TRANSCRIPTIONS
“Transcription refers to converting various kinds of recordings into a document which can be managed manually or electronically with various kinds of analysis methods” (Kananen, 2011, p. 57).
Usually focused interviews are to be transcribed as accurately as possible. This
includes gestures, actions, hand moves and other situational remarkable events
of the focused interview that may occur. When the focused interview is recorded,
it limits out the body language of the interview situation and therefore it is hard to
be transcribed into the summary of the interview. Therefore it is important to make
a clear cut decision about what is necessary and make a transcription for the
good parts.
There are several levels and techniques for doing a transcription. Most usually
interviewers use word for word, standard language or propositional techniques.
Word for word is the most precise and accurate, however it is at the same time
only rarely needed. Standard language is taking everything into proper literature
from slang and dialectical expressions. Propositional technique is more about
transcribing the key messages or observations only. (Kananen, 2011, p. 57.)
5.2.2 PROJECTED TECHNIQUE IN THE INTERVIEW
Projected methods utilize pictures, tables and other forms of visual material.
Using the projected method in an interview requires the researcher to have a
good understanding about the phenomenon already and the ability to connect the
used material into the research. This method was used in this particular research
during the interviews. The interviewees received a picture of the Business Model
Canvas theory and based on the picture the last thematic questions were asked.
The projected method allowed the interviewees to focus on the theory at hand
and imagine the theory being used in the internal funding processes of Turku
University of Applied Sciences. This way the answers to the last interview
questions were more realistic and reliable as the interviewee was able to connect
the theory with the focused process. (Kananen, 2011, p. 64.)
31
6 THE INTERNAL FUNDING CASE: IB-HUB
This chapter is meant for the presentation of the project case: IB-HUB. In addition,
the chapter will present the applied Business Model Canvas theory on IB-HUB.
The applied version of the theory on IB-HUB case was also presented during the
interviews and it has received positive feedback during the interviews. IB-HUB
has already applied for the internal Research, Development and Innovation
funding before this theory was applied to the project planning.
6.1 INTRODUCTION OF IB-HUB
“IB-HUB is an international, multilingual team of business students and experts –
faculty and staff – at Turku University of Applied Sciences” (IB-HUB, 2014). IB-
HUB’s main mission is to “…enhance your business results and to develop our
students’ competences with real world projects.” (IB-HUB, 2014).
IB-HUB is aiming to provide help for the SMEs in South-West Finland for growth
and expanding their businesses to a multinational level. IB-HUB is formed by a
group of Turku University of Applied Sciences lecturers and experts who aid
students with their company cases.
These cases are often projects, which the company has requested to be done in
co-operation with the students of IB-HUB. As a project, IB-HUB started with
different project name and a rough idea of project factory. This project factory
was to be run by students and coached by the lecturers as a part of the degree
activities. From this the idea grew into internationalization themed project factory,
which later on was named as IB-HUB.
The first activities, which IB-HUB was establishing, was the organizational
structure, website for IB-HUB and Internationalization seminar 2013. These
mentioned activities took mostly place in 2013 and since that they have been the
building ground for the IB-HUB organization.
32
Later in 2013, IB-HUB took over another seminar “Open Innovation Seminar
2014”, which had already been run independently by students and teachers in
the previous years. This gave IB-HUB a trademark of these two main events per
year, with a growing number of actual company cases for students to tackle upon.
This project was later in 2014 presented in the Innovative Business and
Entrepreneurship Research, Development and Innovation group as a project for
applying EU funding and internal funding. Currently, IB-HUB has a manager to
lead the development of this project. As the current IB-HUB Manager, Nicolas Le
Grand promises to develop learning and business opportunities for Turku
University of Applied Sciences students and IB-HUB clients, by co-operating
together. (IB-HUB, 2014, p. 2.)
6.2 IB-HUB CASE TESTED ON BUSINESS MODEL CANVAS
As a project with actual need for a business model, the Business Model Canvas
theory supports IB-HUB excellently. Here we can reflect on the previous pages
about the Business Model Canvas theory and go through the different parts of IB-
HUB’s Business Model Canvas.
As the project is capable of defining all the different Building Blocks and filling
them according to the block requirements, we can have a good overview of this
IB-HUB project. It is clear, offers extensive support to comparing the project
strengths with its weaknesses and a layout that can be analysed from many
perspectives. One of these perspectives is the Channels, through which the
Value Proposition is delivered to the Customer Segment and how the Customer
Relationship is affected by this Channels activity. It is quite usual that projects do
not go through this type of perspectives when trying to plan their idea. (Interviews,
2014.)
This application of Business Model Canvas together with the IB-HUB case proves
the suitability of Business Model Canvas in project planning phase. This means
that Business Model Canvas is also applicable in other BIL faculty Research,
Development and Innovation projects in Turku University of Applied Sciences.
33
6.3 BUSINESS MODEL CANVAS OF IB-HUB
IB-H
UB
offe
rs
(inte
rnatio
naliz
atio
n) p
roje
ct b
ased
serv
ices in
a
tailo
red m
eth
od fo
r each s
pecific
custo
mer
IB-H
UB
work
s a
s a
connect p
oin
t betw
een th
e fu
ture
em
plo
ye
es a
nd th
e
em
plo
yers
.
IB-H
UB
cre
ate
s
additio
nal v
alu
e to
T
urk
u A
MK
thro
ugh
pro
jects
made fo
r com
panie
s
Econom
ical c
hoic
e
for p
roje
ct
work
/co
nsultin
g o
f th
e c
om
pany
IB-H
UB
targ
ets
lo
cal s
mall a
nd
mediu
m s
ized
com
panie
s in
the
south
west re
gio
n
of F
inla
nd
Turk
u u
niv
ers
ities
City
of T
urk
u
Oth
er e
xte
rnal
partie
s w
ho a
re in
need o
f pro
ject
work
Turk
u U
niv
ers
ity o
f A
pplie
d S
cie
nces
Team
Fin
land
Vars
inais
-Su
om
i
Yrity
ssalo
Ely
-Keskus
Regio
nal c
ou
ncil o
f S
outh
West F
inla
nd
Univ
ers
ity o
f Turk
u
Åbo A
kadem
i
Liik
esiv
isty
sra
hasto
Oth
er
Mark
etin
g IB
-HU
B
and th
e s
erv
ices
availa
ble
.
Cre
atin
g p
roje
ct
tam
s a
nd le
arn
ing
thro
ugh w
ork
ing in
pro
jects
for s
tudents
Fin
din
g m
ore
partn
er
univ
ers
ities a
nd
sponsors
Meetin
gs,
E-m
ails
,
Depen
din
g o
n
custo
mer’s
needs
Pers
onal
Unders
tand
ing
the c
usto
mer’s
needs b
y c
lose
ly
com
munic
atin
g
and c
o-o
pera
ting
Hum
an
Resourc
es, IT
to
ols
, facility
Hum
an re
sourc
e c
osts
(sala
ries e
tc.)
Mark
etin
g c
osts
, custo
mer m
eetin
g
costs
P
roje
ct c
osts
F
acility
costs
O
ther c
osts
Pro
ject in
com
e (c
harg
ed fro
m th
e c
usto
mer)
Pro
ject re
sult/s
ow
ners
hip
(if usable
for s
ellin
g)
Exte
rna
l & In
tern
al fu
ndin
g
Sponsors
hip
s
Figure 6: IB-HUB Project Plan (v05, 2013) applied with Business model Canvas (Foundry, 2014).
34
7 INTERVIEW SUMMARY
For the research there were two person interviewed from BIL faculty in Turku
University of Applied Sciences. The interviews were done both with the same set
of questions from which the interviewer continued with another set of questions
unique to both interviewees. The purpose was to see the BIL faculty from different
points of views in order to:
1. empower the results with academic reliability
2. to find differences from the interviews, which could be compared.
The interviews were performed in Finnish as both of the interviewees preferred
their national language and they have been used to create the interview
summary.
7.1 INTRODUCTION OF THE INTERVIEWEES
This introduction part is to present the interviewees that have taken effort into this
research by being interviewed. This is only a short introduction to their
professional life and what is the effect they are able to bring into the research.
Jaana Kallio-Gerlander,
Head of Business and Research.
Reason for choosing Jaana to be part of the research was natural,
as she is the Head of Business and Research and a member of the
steering group. Her knowledge about how the internal funding
processes are done is clear and reliable. She is able to make
changes, propose new tools for the internal funding process and
compare this research with her everyday work. Therefore her
interview provides valuable point of view to the current situation on
how Research, Development and Innovation works in general at
Turku University of Applied Sciences.
35
Tiina Suni,
Project Manager and Coordinator of the Faculty of Business, ICT and
Life sciences.
Reason for selecting Tiina to be the other interviewee was based on
her working position. She works closely with multiple projects from
BIL faculty, participates in two research groups, observes and goes
through a lot of Research, Development and Innovation projects for
the internal funding. Tiina is in a position to suggest and implement
part of this research in her daily working life. Tiina works closely with
Jaana, providing a good chance to compare and measure the
opinions and information by both interviewees.
There were three main sections for the interview, which were categorized by
different themes. These themes were: project funding in Turku University of
Applied Sciences, internal project funding processes inside BIL faculty in Turku
University of Applied Sciences and Business Model Canvas applied to internal
project funding processes and compared with the NABC model.
7.2 PROJECT FUNDING IN TURKU UNIVERSITY OF APPLIED SCIENCES
Research, Development and Innovation project funding has grown much in the
past ten years of working inside Turku University of Applied Sciences. In the
previous years, projects have been more personally attached and having
personal interests as the motives for suggesting a new project idea. Nowadays,
the projects are planned in the Turku University of Applied Sciences strategy and
therefore they have a great impact on the general management and
organizational activities.
Projects have grown in size, resource usage as well as the amount of external
partners involved. Projects took a new form during the past few years, becoming
more applied and supportive based towards the society and the economy.
36
In the past it was more important to research some very detailed and narrowed
down scope projects. Nowadays it is important to find a wide understanding and
application of the research project in the general picture.
Research projects are a part of the Turku University of Applied Sciences strategy
as to serve the local companies and assist them with their problems by offering
solutions that benefit both parties. The impact of research projects has started to
affect much wider audience inside Turku University of Applied Sciences than
what it had back at the start of 2000 century. It even means that some of the
employees are mainly employed due to project activities in Turku University of
Applied Sciences.
The observations reveal that some of the growing needs of project based
Research, Development and Innovation activities inside Turku University of
Applied Sciences have come directly from the need for finding funding for the
activities performed inside the organization. This effect comes from the
Polytechnic reform 2011-2014 (Ministery of Education and Culture, 2014).
The public support for base activities has been reduced during the past few years,
giving a reason for seeking the external funding through Research, Development
and Innovation projects. This works both in good and bad, encouraging the
organization to reach out from within, while giving much harder time to fulfill the
given requirements due to the lack of public support.
7.2.1 INTERNAL PROJECT FUNDING PROCESSES INSIDE BIL FACULTY IN
TURKU UNIVERSITY OF APPLIED SCIENCES
Project process inside Turku University of Applied Sciences is actually dividing
opinions. The journey of a new project is presented in Figure 4, p. 24. Looking
closer at the idea planning phase where the raw idea is taken to Research,
Development and Innovation group is crucial. According to the interviews made
for the research, every 3rd or 4th project idea is far from being usable.
37
According to the observation, this effect creates a massive amount of working
hours that could be spent better. These ideas that are not very well thought
through before sending onwards to the Research, Development and Innovation
group are seen nearly weekly in Turku University of Applied Sciences.
Observation reveals that the reason for this phenomenon could be the lack of
instructions and knowledge among Turku University of Applied Sciences staff
members such as: How Research, Development and Innovation works and what
are the processes for a new idea to go through before it can apply for funding.
There are additional reasons to this, as the fact that the project might be too
narrow or lacking the meta level thought. Some ideas for projects are similar
although they do not meet inside Turku University of Applied Sciences
organization as things are divided into faculties. As there is no coordination
between faculties and Research, Development and Innovation groups that would
try to bring these similar project ideas together. These reasons are only one piece
of the whole picture. Part of the phenomenon could be the size of Turku University
of Applied Sciences organization. According to the observation, as the Research,
Development and Innovation activities grew during the years into larger
quantities, the control and coordination of these activities suffered.
In addition the activity of the staff members in Research, Development and
Innovation has started to divide into two groups. There are active staff members,
and there are those who are less knowledgeable about the whole Research,
Development and Innovation. Therefore it is highly important to keep mentioning
Research, Development and Innovation in several places and try to reach the
information about activities to every corner of Turku University of Applied
Sciences.
From around 40 to 50 projects that are ideas and planned somewhat further, only
10-15 projects actually end up receiving funding and to start up the project. This
is of course only the case in BIL faculty. There are hundreds of projects and ideas
coming and going to the work desk of Head of Business and Research annually.
38
7.2.2 BUSINESS MODEL CANVAS APPLIED WITH PROJECT PLAN AND
COMPARED WITH THE NABC MODEL
Visibility of the project for both presenting it in the Research, Development and
Innovation steering group, as well as planning the raw idea into a project form
could be eased by using Business Model Canvas presented in the earlier
chapters of this research. Business Model Canvas is allowing the project to keep
the ‘big picture’ of the project itself, while focusing on a specific subject to the
project. Business Model Canvas clarifies the project idea and makes it easily
understandable. Both interviewees agreed that adopting Business Model Canvas
into project planning in the Research, Development and Innovation as an extra
tool for managing and comparing projects is a good idea.
The clarity of Business Model Canvas is beneficial for comparing the projects with
each other as proved by the case of IB-HUB. Interviewees were interested to
observe the IB-HUB case from Business Model Canvas as it was visual and
impressive. The visuality of Business Model Canvas is definitely having a strong
benefit when it comes to applying it to the project planning as an additional tool.
Comparing Business Model Canvas together with the currently used NABC
model, there were similar opinions around the comparison. They are two different
theories with different way of looking at the content. The other was developed as
a business model while the other was created as a systematic method for
approaching the value proposition. Similarities from these two theories can be
found in trying to bring the value proposition out from the mass of information and
to bind relevant information around the target of observation in a business minded
point of view. Differences are mainly in the way of presenting the value
proposition and some additional components, such as: the NABC model’s ‘C’, the
Channels, Revenue Stream and Cost Structure from Business Model Canvas.
The general opinion of the interviewees was to keep both theories available for
the Research, Development and Innovation projects. Then it could be the choice
of the project manager to take either one of the theories into use and apply it in
the internal project idea planning stage.
39
8 CONCLUSION OF THE FINDINGS
The research results clearly show the need for improvements in the internal
funding processes of Research, Development and Innovation inside BIL faculty
in Turku University of Applied Sciences. There are many improvements to be
done, while as one of the project planning based improvements, it is noted that
Business Model Canvas definitely works as a tool to reflect the project idea upon.
The research clarified the theory of Business Model Canvas, as well as
implemented it into internal project funding processes. Applying the theory into
internal project funding processes (Figure 6, p 33.) was proven to be effective
way to look at the project from a more business point of view and gain advantage
through the visuality for the project.
8.1 DISCUSSION OF THE FINDINGS
According to findings from applying the Business Model Canvas theory in a
project and the interviews (2014) done for this research, it is highly possible to
adopt the Business Model Canvas theory as an additional tool for internal project
funding processes and use it as a part of the Research, Development and
Innovation activities. Business Model Canvas should not remove the current
theories and processes from being used yet, but it may give a choice in the
internal funding processes. No matter which of the implementation method used,
the Business Model Canvas could be added as an additional tool for being used
in Research, Development and Innovation projects. Other improvements that
were not attached to the research objectives were found in addition to the main
topic.
Some of these improvements based on the observation and the interviews
(2014), would be to reduce the time it takes to have the internal funding
application signed by the rector after it has been approved in the Research,
Development and Innovation steering group’s session. Other improvements
could be to spread the knowledge about Research, Development and Innovation
activities to all the employees. The employees are mainly divided into two,
Research, Development and Innovation activists and those who are totally
40
unfamiliar with Turku University of Applied Sciences Research, Development and
Innovation activities. Therefore it would be highly recommended to have further
research about the different faculties and their understanding of the Research,
Development and Innovation task inside the organization.
8.2 SUGGESTION/S BASED ON THE FINDINGS
Many new suggestions came up during the process of the research. These
suggestions are both easily adopted and simple to understand from the
employee’s perspective. The time taken to adopt some of these suggestions may
be hindered by the large size of Turku University of Applied Sciences. Therefore
it could be first implemented in the BIL faculty. These suggestions are based on
the interviews of the Research, Development and Innovation in Turku University
of Applied Sciences.
As the Business Model Canvas theory is not yet widely used to improve
funding processes, it would be good to have a test-drive phase for
implementing it into the Research, Development and Innovation project
planning. Suggestions for where Business Model Canvas should be placed in
the project planning were different. One suggestion was for Business Model
Canvas to be adopted in the very early and late phases of internal funding,
while the other suggestion was to adopt it more when starting to apply for
external funding.
All in all, projects could apply Business Model Canvas as an additional tool
during any phase of the project planning. It is suggested that there could be a
free choice between Business Model Canvas and the NABC models. This is
because some projects are not easily described with NABC, while some
projects are not easily described with Business Model Canvas. This could
create a better ground for comparing projects and understanding the core idea
in the project.
41
The suggestion based on the researcher’s observation are to implement
Business Model Canvas in the very beginning of a new idea molding, so that the
group manager could use Business Model Canvas later in the internal funding
process to explain about the project to the steering group. Another suggestion is
to implement Business Model Canvas as a tool, which the project can choose for
presenting the idea in their project plan.
It would be suggested to allow a choice of method to be used when
introducing a new idea to the Research, Development and Innovation group,
not forcing new projects to follow one single type of molding theory. In other
words, choosing between NABC and Business Model Canvas should be
allowed, or using them both. This choice would be up to the project manager
when planning the project plan. Further research is suggested to be done
upon the Business Model Canvas and internal funding processes. It could be
beneficial to run test-drive for the new tool before implementation. In full
understanding about the theory, Business Model Canvas could improve and
hasten the internal funding processes and make it easier for the steering
group to see the idea of the project in a larger picture.
As the project planning and process from Research, Development and
Innovation group to receiving the funding is taking quite long or the
communication is not visible enough, there is much to be improved. The
process could be speeded up by having more Research, Development and
Innovation steering meetings and taking more time to go through the individual
project contents. This could improve the final results for the resource usage
in comparison to the benefits from funding a project.
Additional research is suggested to be conducted to find out about the
Research, Development and Innovation situation in the whole Turku
University of Applied Sciences. It would be beneficial to find the best
processes and activities performed by all of these different faculties and how
they could be brought together to maximize the performance of the internal
funding processes at Turku University of Applied Sciences.
42
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Appendix 1. Interview for the Research, Development and Innovation in Turku University of Applied Sciences
Interview Vol1.
Present the idea of why we are having the interview and what is the topic
We are here to discuss about internal funding processes of Turku University of
applied sciences. We are discussing the possible synergies of Business Model
Canvas with the project plan and IB-HUB case project. This interview is part of a
thesis research work carried out by a BBA student of Turku University of applied
sciences.
The interviewer:
Tom Sivén, BBA student of Turku University of Applied Sciences
The interviewees:
Jaana Kallio-Gerlander, Head of Business and Research
Tiina Suni, Project Manager & Project Coordinator
Questions:
General questions:
How have the projects made by Turku University of Applied Sciences
changed in the past years, have they become more international or
national based?
Have the project size grown by for example amount of Human
Resources used, other resource needs?
How many projects have you applied funding for in the past three years?
/How many projects have you received as funding applications in the
past three years? >10 11-25
25-50 50-100 <100
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Has the amount of newly found projects increased during the past five years or decreased in your opinion? Any reasons why the phenomenon?
How was the projects funded before the changes in Turku University of Applied Sciences organization?
How the projects are/will be funded in the current situation/future of Turku University of Applied Sciences?
How does the internal project funding process work inside Turku University of Applied Sciences currently?
What kind of projects draw more interest for receiving funding? o Why does XXX kind of projects draw more interest?
How often do you meet a project idea that is not completely thought
through before receiving it?
o How would you improve the situation?
Do you feel that the current internal funding system is working as it
should, or does it require improvements?
o What type of improvements?
Have you found the internal funding process of Turku University of Applied Sciences to be (you can choose multiple answers)
a) Too complex b) Great!! c) Difficult to use and apply
Are you familiar with the Business Model Canvas theory created by
Alexander Osterwalder?
o Have you ever used Business Model Canvas in projects?
Case related questions:
Case topic is about the internal funding process of the: IB-HUB. Present the IB-
HUB project plan v.05 without Business Model Canvas. Then introduce the edited version of the
same project plan and ask differences.
How could the project improve the internal funding method used?
Does the edited version stand out because of Business Model Canvas as a part of the executive summary?
Should Business Model Canvas be a part of the executive summary or just as an appendix file?
How does this example project plan with Business Model Canvas support the internal funding process for a project?
Do you find any benefit for having the Business Model Canvas theory attached to the project plan?
Would you be able to apply Business Model Canvas and use it for a project in the future?
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Appendix 2. The crew of Turku University of Applied Sciences
The new management crew of Turku University of Applied Sciences (Turku University of Applied Sciences, 2014).